Marketing Capability Development: most marketers spend lots and measure zero

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Flock Associates Marketing Capability Development

Flock’s Maarten Albarda, recently collaborated with the World Federation of Advertisers (WFA) on a piece of research covering the topic of building Marketing Capabilities within companies. The results were not great.

Many companies today have a “people” statement in their corporate manifestos, visions or operating principles. Statements like “Our people are our most important asset” or “developing and nurturing the careers of our people is critical to the success of our company” are commonplace.

The reality is that, especially during the economic crisis of 2008/2009 the investment in the development of people skills and capabilities has taken a serious nose-dive. According to US data from Deloitte, spending in capability development went down by 11% in each of those two years, for a decrease of 22% in total. Spend in capability development is now growing again, but what it is really doing is making up for lost time.

The biggest shock from the WFA research findings was that only 39% of marketers said they have KPIs to track the impact of their investment in capability building.

Can we just repeat that for effect? Only 39% of marketers measure if their investment in people capability building has any impact on their business at all. A robust 61% stated that Marketing Capability Programs were not linked to year-end Performance Criteria. And 71% answered the question “Are you using KPIs to track your marketing capability development progress?” with a simple but astounding “No”.

We are not talking about small investments either. Again according to the Deloitte study, companies spend anywhere between USD900 and USD1,400 per person per year on capability development, depending on the maturity of the organisation. And that is only on the learning content piece, so add to this time away from the office, travel cost, outsourced resources to deliver content, etc. and multiply it by the number of employees engaged in these activities and you are quickly talking about sizeable budgets.

Another challenge we found was the lack of clarity around what “Marketing Capability Building” actually means. To quote from the WFA study Executive Summary, which you can find here: “Almost 60% of respondents said their organisation has a clear definition but the definitions shared by our respondents show that the term means something very different to everybody. One common misconception is to reduce the scope of marketing capabilities to training/skill gapping (57% of respondents confirmed this is the case in their company).”

The WFA study further revealed that 54% of respondents felt that their company did not have a world-class marketing team. Respondents felt their organisations needed the most Capability Building attention in the following areas: CRM, Content / Storytelling, Shopper Marketing, Digital Integration and Marketing Innovation.

We also looked at relative scores, combining low Current Performance scores with High Importance scores. This revealed, that “Media” and “Brand Positioning” required an increase in skills and capabilities, as they were the number 1 and 2 in importance with relative low current performance scores.

The study found that there are already a number of companies that are doing Capability Building well. They are P&G, Unilever, Nestlé, The Coca-Cola Company and Diageo. For everybody else there is clearly a lot of work to be done.

Our recommendation is to start by measuring if what you are doing today or have been doing to date is having any kind of effect, and build from there. Should you wish to discuss how you can build an effective Marketing Capability Strategy, contact us here.

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